A management representation letter is a letter from the directors to the auditor confirming that they have prepared the accounts properly, given the auditor all relevant information and recorded every transaction, plus any other points the auditor needs confirmed in writing. ISA (UK) 580 requires the auditor to ask for it, and if the directors refuse to give the core confirmations the auditor must disclaim an opinion. The letter is evidence, not a formality, and signing something untrue can be a criminal offence.

Why does the auditor need written representations at all?

Paragraph 3 of ISA (UK) 580 describes written representations as necessary information the auditor requires, and so a form of audit evidence. Paragraph 4 adds the important limit: they do not provide sufficient appropriate evidence on their own about anything they cover, and receiving them does not reduce the other work the auditor does.

The reason they are still required is explained in paragraph A7. The auditor cannot tell from other evidence alone whether the directors have given it all the information agreed in the engagement terms. The only way to know is to ask and get a written answer. Paragraph A1 also notes that asking for written rather than oral confirmation tends to make management think harder, and that a refusal or change to the wording can itself alert the auditor to a significant issue.

In the UK the directors are responsible for preparing the accounts, so ISA (UK) 580 says that representations critical to the audit should come from those charged with governance rather than from managers below board level. For a typical owner managed company that means the board.

What must the letter contain?

Two sets of confirmations are compulsory under ISA (UK) 580:

  • Preparation of the accounts (paragraph 10). The directors confirm they have fulfilled their responsibility for preparing the financial statements under the applicable framework, including giving a true and fair view, as set out in the engagement terms.
  • Information and completeness (paragraph 11). The directors confirm they have provided all relevant information and access agreed in the engagement terms, and that all transactions have been recorded and are reflected in the accounts.

Paragraph 12 requires these responsibilities to be described in the same way as in the engagement letter, which is one reason the auditor will want the engagement letter and representation letter to match.

Other ISAs (UK) require specific representations. Appendix 1 of ISA (UK) 580 lists them, including fraud (ISA 240), laws and regulations (ISA 250), uncorrected misstatements (ISA 450), litigation and claims (ISA 501), accounting estimates (ISA 540), related parties (ISA 550), subsequent events (ISA 560) and going concern (ISA 570). The illustrative letter in Appendix 2, which the FRC notes has not been tailored for the UK, includes for example a statement that the effects of uncorrected misstatements are immaterial with a list of them attached, and confirmation that the directors have disclosed all known actual or suspected fraud and the identity of all related parties.

The auditor may add further representations under paragraph 13 where they are needed to support other evidence. Paragraph A10 gives examples such as plans or intentions that affect the value or classification of assets, actual and contingent liabilities, and title to assets or charges over them. Paragraph A11 suggests a representation that the directors have told the auditor about all deficiencies in internal control they know of.

Can the directors limit what they are confirming?

To a degree. Paragraph 11-1 allows the representations under paragraphs 10 and 11 to be given “to the best of our knowledge and belief”, and this does not trigger a disclaimer if the auditor finds no evidence they are wrong. Paragraph A6 lets the auditor ask the directors to confirm they have made such enquiries as they considered appropriate, without expecting a formal internal process beyond those already in place.

The auditor may also agree a threshold amount, as paragraph A14 explains, so that the completeness representation does not require directors to vouch for trivial items. Paragraph A27 gives examples of acceptable modified wording: that all information has been provided except records destroyed in a fire, or that all transactions with a material effect have been recorded. Modified wording is not the same as refusal, but the reason behind it may still affect the audit opinion.

When is the letter signed and dated?

Paragraph 14 requires the representations to be dated as near as practicable to, but not after, the date of the auditor’s report, and to cover every period referred to in the report. Paragraph A15 explains that the auditor’s report cannot be dated before the representations, because they are part of the evidence. In practice the board approves the accounts, signs the letter and the auditor signs the report on the same day or within a day or two. If the letter is signed weeks before the report, the auditor will ask for it to be updated.

New directors sometimes say they cannot confirm a period before they joined. Paragraph A18 rejects this: it does not reduce their responsibility for the accounts as a whole, so the auditor still asks them to cover the full period. For the board’s side of approval, see approving and signing company accounts.

In the UK, paragraph A22-1 says the auditor tells those charged with governance which representations it is requesting before they approve the accounts. ISA (UK) 260 paragraph 16(c)(ii) requires this communication unless all of those charged with governance are involved in managing the company.

What happens if directors refuse to sign or the letter is unreliable?

If any requested representation is not provided, paragraph 19 requires the auditor to discuss it with management, reassess management’s integrity and its effect on all representations and evidence, and decide the effect on the opinion.

The consequence is fixed for the core confirmations. Paragraph 20 requires the auditor to disclaim an opinion if the directors do not provide the representations required by paragraphs 10 and 11, or if there is sufficient doubt about their integrity that those representations are not reliable. Paragraph A26 explains that the possible effects are pervasive, which is why a disclaimer rather than a qualified opinion follows. The forms of modified opinion are explained in audit opinions.

If a representation conflicts with other evidence, paragraph 17 requires the auditor to try to resolve it and, if it cannot, to reconsider its assessment of management’s integrity and the reliability of everything they have said.

What is the legal risk of signing an inaccurate letter?

Section 499 of the Companies Act 2006 gives the auditor the right to require information and explanations from officers and employees. Section 501 makes it an offence knowingly or recklessly to make a statement to the auditor, oral or written, that conveys such information and is misleading, false or deceptive in a material particular. On conviction on indictment the maximum is two years’ imprisonment, a fine or both.

The representation letter sits alongside the statement in the directors’ report required by section 418, that so far as each director is aware there is no relevant audit information of which the auditor is unaware and that each has taken the steps they ought to have taken. A director who approves that statement knowing it is false, or reckless as to that, commits an offence if they fail to take reasonable steps to prevent the report being approved. See directors’ report requirements.

How should directors handle the letter in practice?

Illustration only. A manufacturing company’s auditor sends a draft letter. It includes a standard paragraph confirming there are no undisclosed related party transactions, and a specific paragraph saying the directors intend to keep a loss making subsidiary trading and support it for at least twelve months. During the year one director’s brother supplied goods worth £40,000 on normal terms. Before signing, the finance director:

  1. checks that the brother’s company was disclosed to the auditor and appears in the related party disclosures where required;
  2. confirms the board has actually decided to support the subsidiary and that the minutes say so;
  3. reviews the attached schedule of uncorrected misstatements and agrees the board accepts them as immaterial;
  4. asks the auditor to amend any paragraph that does not reflect what the board knows, rather than signing it as drafted.

What are the common mistakes?

  • Treating the letter as boilerplate and signing without reading the specific paragraphs, which are usually where the risk sits.
  • Signing a letter that is out of date because the report date slipped, so events after the reporting period are not covered.
  • Letting the finance manager sign alone when the representations concern board decisions and intentions.
  • Refusing to sign over a disagreement about one paragraph instead of agreeing amended wording, which risks a disclaimer.
  • Forgetting that some points, such as going concern intentions, need board minutes behind them because a representation alone is not sufficient evidence.

Solar Protect provides tax investigation insurance for businesses and fee protection schemes for accountancy practices. Read how our cover works or get a quote.

Related Accountapedia entries

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.